The current warehouse management system (WMS) market is expanding at an amazing rate, with a compound annual growth rate (CAGR) of 15.2 percent. Digital technologies, including cloud-based platforms, encourage interest in the current WMS market on the part of supply chain executives. By some estimates, reports Allied Market Research, the warehouse management system market will swell to more than $3 billion by 2022, and adoption of WMS systems is expected to continue with the IoT-based value in the WMS market to surpass 19 billion by 2025, says Grand View Research. Warehouse Managers must understand the risks in the market experiencing such growth, how it affects supply chain executives and their relationships with Warehouse Managers, and what it means for WMS selection.
The Problem: The Current WMS Market is Saturated with Vendors
A key concern among supply chain executives considering implementing new WMSsolutions lies in the number of WMS vendors in existence. At the turn of the 21st century, the WMS vendor market could be boiled down to around 105 vendors, with the top five owning roughly 33 percent of the market, reports Ed Hess of Supply Chain Market. Today, the market statistics are almost impossible to identify.
According to Warehouse Logistics, there are more than 170 vendors located in Germany, Switzerland, and Austria. The number of vendors in the US could easily surpass this statistic, and each country has worked heavily on developing WMS solutions with the rise of e-commerce. Pair that with the use of cloud-based computing, and even small to midsized warehouses have the capacity to develop their own WMS and market the system to other warehouses. As a result, today’s Warehouse Managers have virtually limitless choices in selecting WMS solutions. Unfortunately, with so many options available in the WMS market, confusion occurs in members of the C-Suite when considering the implementation of a new WMS.
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The Solution: Supply Chain Executives Are Reviewing OTS Solutions with Greater Focus
The only solution to separating the noise from the potential benefits of modern WMS solutions lies in a thorough review of such solutions. In upper-level management, this translates into more review of off-the-shelf (OTS) solutions with greater attention to detail. Supply chain executives are focused on time to ROI, the net impact on profitability, and how a system can effectively increase production volume in a warehouse. Moreover, the needs of a modern WMS can easily require more staff and experience than your IT department contains, reports Supply & Demand Chain Executive. So, getting it right the first time is crucial to ROI and successful implementation.
The Reward: Steps to Picking the Right WMS for Your Warehouse
Simply having an engaged team of C-Suite executives is not enough to ensure your organization selects the right system. Executives and Warehouse Managers need to be on the same page with respect to selecting, implementing, and launching a new WMS. The Warehouse Manager must be heavily involved in picking the right WMS for your facility. To reduce delays and select the correct system, Warehouse Managers should follow these steps:
- Conduct a business review to determine the needs and limitations of existing systems.
- Identify off-the-shelf solutions that meet the needs of the existing warehouse.
- Verify that all systems considered are scalable.
- Recognize a realistic timetable for implementation, such as 6 to 18 months.
- Create a change management team to oversee the WMS selection and implementation process.
- Communicate system considerations with C-Suite executives and use feedback from supply chain executives to guide the change management team.
Know Why the Current WMS Market is a Top Focus to Boost Competitive Advantage in Your Warehouse
Selecting the first available WMS will not give your company a competitive advantage, and it may only improve short-term profitability. Selecting the right WMS will allow for continued growth and expansion into new markets, a key concern in the age of e-commerce, and give your team the ability to move more product, fulfill more orders, and meet the increasing demands of consumers. Warehouse Managers who take the time to understand the current WMS market can successfully position their organizations to stand out from the crowd and boost competitive advantage. To learn more about what type of WMS and which vendors may be the best choice for your organization, contact Veridian Solutions.